4 most important rental car insurances you really need

Anybody renting a car is confronted with many different insurance packages. Here you can find out which rental car insurances you absolutely need and which one only exists to make more money for the rental car company. We will show you the most important services and when it is worth paying more for more protection.

The 4 most important rental car insurances

Here are the 4 most important rental car insurances. Lets begin with the most important one.

1. Collision Damage Waiver (CDW)

CDW is absolutely necessary, if you want to rent a car. Sometimes it is also called Vehicle Damage Insurance (VDI)[1]. It covers damages caused by the driver. That insurance excludes damages caused by gross carelessness as well as damages to the transmission of the car and the loss of the rental car keys.

The different benefits included in CDW can vary a lot. There are insurance packages with self-participation and without self-participation. In the US a CDW without self-participation is compulsory, while some European rental car companies leave the customer the choice. Here the range of self-participation varies depending on the rental car company and vehicle class.

Please note: Even if you take an insurance without self-participation, you have to give the rental car company a deposit. If your rental car is getting damaged, the rental car company will first keep the deposit, but you get the money back later on, either from the rental car company or from the company, who has given you the rental car contract (e.g. Auto Europe or a similar platform).

In each country we recommend a CDW without self-participation regardless of the rental car company.

2. Liability insurance

A car liability insurance with a sufficient amount of cover is also necessary. It covers damage caused by the driver to objects and people who are not in his car.

In most countries in Europe, there are sufficient minimum sums insured by law. In the US, however, these vary from state to state and are very low in some cases, while in Asian and South American countries there is often no legal regulation. Therefore, you should pay particular attention to the liability coverage for every rental car offer. We recommend in any case a liability coverage of at least 1 million USD. This amount is usually sufficient.

In a later blog post, we will write more details about the car liability insurance.

3. Theft insurance

Theft insurance is highly recommended. This is needed when the car gets stolen, but it does not cover the theft of private items from the car or if the car was lost after key loss.

There are also theft insurances with or without self-participation. Our recommendation is also here: go with a theft insurance without self-participation, so you are on the safe side. This is especially advisable, because the self-participation of theft insurances is usually much higher than the self-participation of Collision Damage Waivers. Be sure to take a look at the rental terms before booking, so you know the amount of your own participation.

4. Glass and tire insurance

Damage to glass, tires, roof and underbody are not automatically covered by the CDW, but require their own insurance protection. This is generally guaranteed by the so-called glass and tire insurance. Whether the roof and the underbody are included in the glass and tire insurance, is written in the rental terms of your rental car provider.

Do I have to buy a "supplementary car insurance" in front of the counter?

No - if you have booked an offer with all the above-mentioned insurance policies and without self-participation, additional supplementary rental car insurances are not needed. Unfortunately, some rental car companies still try again and again to sell you unnecessary insurances in front of the counter.

Do not get pushed into buying any unnecessary insurances! Show the person at the counter your rental car reservation document (in some countries called Voucher) where all booked services and insurances for the rental car are listed. Point out, that what he or she is trying to sell you, is already covered or you just don't need it.

Hint: Losing rental car keys can cost 500 USD or more, and most mass-market insurance companies won't cover lost rental car keys. However, key loss can be covered by supplementary insurances. Some rental car companies offer that, e.g. Sixt Extended Roadside Protection or Hertz Lost Key Service. But there are also independent insurance companies, who do the same. You must know yourself: if you regularly lose your keys, take that insurance. Otherwise don't take it.

Who is covered by the rental car insurances?

Normally all insurances for the rental car apply to the person, who rents the car and all registered additional drivers. In the US, some insurances are automatically applied to the spouse. Please ask your rental car provider for more information about that.

You will lose the complete insurance coverage, if you let an unregistered person drive the car!

Are there any additional costs I should know about?

Some rental car companies charge a processing fee in the event of damage, theft or a violation of the traffic regulations. The amount of this fee will vary depending on the rental car company and will generally not be refunded.